Paradeep Phosphates shares rise 6% on Q2 results, ₹3,600 crore capacity expansion plan

Shares of Paradeep Phosphates Ltd. gained 6% on Friday, November 7, a day after the company reported its second quarter earnings and announced a ₹3,600 crore capacity expansion plan.

As per the plan, the company will add 1 million tonne of granulation capacity and expand backward integration of phosphoric acid by 0.5 million tonne and sulphuric acid by 1.5 million tonne across its Paradeep and Mangalore units, it said.

The investment will enable the company to achieve 5 million MT in sales over the next two-and-a-half years, aligning with its long-term strategy to become a fully-integrated and self-reliance fertiliser manufacturer, the company said in an exchange filing.

Paradeep Phosphates reported a 34% increase in its consolidated net profit at ₹341.94 crore from ₹255.33 crore last year. Its revenue from operations increased 49% to ₹6,872 crore from ₹4,619 crore in the September quarter last year.

The company's earnings before interest, tax, depreciation and amortisation (EBITDA) increased 29.4% to ₹656.48 crore, while its EBITDA margin contracted to 9.55% from 10.98% in the year-ago period.

Meanwhile, the company's revenue from operations in the first half of this fiscal increased 46% to ₹11,376 crore, EBITDA was up 69% to ₹1,313 crore and profit after tax (PAT) increased 135% to ₹659 crore.

The company's managing director and CEO Suresh Krishnan said the successful merger with Mangalore Chemicals and Fertilisers Ltd. (MCFL) expanded the firm's southern presence, enhanced market share and unlocked scale and product-mix synergies. "Our combined production and sales grew 19% and 30% respectively, driven by robust demand for NPK and value-added grades. Efficient working capital management improved our cash cycle by 30 days, maintaining a healthy net debt-to-equity of 0.66x," he added.

Krishnan also said the company has gotten cricketer Rahul Dravid on board as brand ambassador.

Shares of Paradeep Phosphates are trading 6.6% higher on Friday after the announcement at ₹174.75. The stock is up 51% so far this year.

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